Charities Act Valuations – why are they required?
Under the Charities Act 2011, when registered charities engage in property transactions such as selling, leasing, or transferring land or property, they are often required by law to obtain a Charities Act Valuation. This applies to disposal of an interest in land for a term exceeding seven years.
The aim of this legislation is to ensure charitable assets are properly managed and disposed of at fair value. Currently, there is no legal requirement to obtain a Charities Act Valuation for an acquisition, however, it is still recommended to ensure a fair price is being paid for an asset.
The surveyor undertaking the valuation must be a member of the Royal Institution of Chartered Surveyors (RICS) and must act independently of the charity. The valuation report will provide an opinion of Market Value and assesses whether the proposed transaction is in the charity’s best interests. This is particularly important in fluctuating markets or where there may be concerns about conflicts of interest or transactions with connected parties. In addition to providing a Market Value of the property, the surveyor will advise on the best marketing strategy and the most appropriate method of sale to obtain the optimum value for the asset.
The Act ensures that trustees act with due diligence, receive the best possible terms for the charity, and protect its assets. Whether you’re selling, leasing, or transferring property, seeking expert valuation advice can protect your charity’s long-term interests.
Our Charities Act Valuation reports provide trustees with an overview of the property market and the risks and opportunities associated with a transaction, which supports informed decision-making. Our experience and expertise in Charities Act Valuations, ensures that we provide trustees with the right advice to maximise the potential of their asset, in the best interest of the charity.
Section 119 Report
A Section 119 Report is a vital requirement for registered charities undertaking property transactions under the Charities Act 2011. When a charity is considering selling, leasing, or otherwise disposing of a property asset, especially for leases longer than seven years, trustees must obtain a Section 119 Report to ensure they are acting in the charity’s best interest and complying with their legal obligations.
This report, prepared by a qualified surveyor who is a member of the Royal Institution of Chartered Surveyors (RICS), provides an independent, written valuation of the property. The surveyor’s report will assess the market value of the asset, taking into account current market conditions, and recommend the most appropriate method of sale or lease to achieve the optimum value. The Section 119 Report also includes expert valuation advice on marketing strategies, ensuring the property is properly marketed to attract the best possible price or terms.
For charity trustees, the Section 119 Report is more than just a valuation, it is a comprehensive document that demonstrates due diligence and transparency in property transactions. It verifies that the charity land or property has been marketed appropriately, and that the proposed sale or lease price reflects fair market value. This process protects the charity’s assets and helps trustees fulfil their duty to act in the best interest of the charity.
In addition, the Section 119 Report provides guidance on complex property disposals, such as the sale of leasehold assets or the disposal of land, and highlights any risks or opportunities associated with the transaction. By obtaining a Section 119 Report from a RICS qualified surveyor, registered charities can be confident that they are complying with the Charities Act, safeguarding their assets, and achieving the best possible outcome for their organisation.
Ultimately, the Section 119 Report is an essential tool for charity trustees, supporting informed decision-making and ensuring that every property transaction is conducted with diligence, fairness, and in accordance with the law.
for more information, please contact our Valuation team.
